David Speers: The other big export after resources is education. About 68,000 Indian students studied in Australia last year at both the skills training level and the higher education level as well. But Australia really wants to grow this, we’re already the second most popular destination for Indian students after the United States, and you think about the size of the US and the size of Australia, that’s a pretty good effort for Australia. We have a huge delegation here on this trip led by the Education Minister Simon Birmingham and about 120 other representatives from the education sector, trying to showcase what Australia has to offer and why more Indian students should come and live and study in Australia. I caught up with the Minister a while ago.

David Speers: Thanks very much for talking to us here.

Simon Birmingham: Pleasure.

David Speers: Lovely New Delhi, it’s lovely to see you here. Now, Narendra Modi’s government here wants to skill up some 400 million people over the next five years, by 2022. It’s a massive number. What role can Australia play in that?

Simon Birmingham: The numbers and the scale are quite mind boggling from an Australian perspective, and as Malcolm Turnbull’s written in newspapers today, there are more 10 year olds in India than there are people in Australia. So, huge, huge numbers but a big opportunity for us to build on a very successful partnership with India. We are already the second most popular destination for Indian students who study abroad, straight after the United States. So, some 68,000 or so students enrolled in Australia last year. That’s about 15 per cent of all Indians who go overseas. So, big success already but many opportunities to build on that.

David Speers: Just on the most popular destination, as you say, we’re second to the United States for attracting Indian students, I’ve seen some suggestions that Donald Trump’s positions on immigration and Muslims and so on have made a lot of Indians feel uncomfortable about going there. Are we seeing that at all? Are Indians more attracted to Australia because of Donald Trump?

Simon Birmingham: Well, it’s probably a little early to say whether or not that’s the case but we’ve really rebuilt in terms of the reputation and standing of Australia from some difficult times a few years ago and those times, I guess, do highlight the fact that small incidents or issues, public perceptions, as well as visa rules, which the Labor Government tightened down on quite abruptly at the time and there’s some of that happening in the UK at present as well in relation to international students, can have a negative impact in a market. Now, we’ve recovered since then and that’s great news because this is…

David Speers: And in fact, we’ve picked up beyond where we were before those incidents around the Indian students being assaulted in Australia.

Simon Birmingham: Well and truly, and so it’s a sector now worth more than $2 billion to the Australian economy in terms of the contribution that it makes and that’s jobs right across Australia in a whole range of different fields, hospitality, accommodation…

David Speers: There have still been problems, though, haven’t there with fraud in relation to some students, including from India, maybe not having the qualifications they should to study in Australia or not having the money to pay for the course that they should in Australia using the student visa system as a backdoor way to get into the country?

Simon Birmingham: We’ve been very cautious in terms of the way we’ve opened up the visa system and improved it from the days when Labor clamped down. Because of course, border security and ensuring we have confidence in our immigration system is something that our government takes incredibly seriously. So, only providers who have high repute and great processes in place are able to then provide education and training to people get a visa to ensure that we have really strong safeguards. But we’re seeing really good satisfaction levels, latest data that’s come out shows that more than 90 per cent of Indian students studying in Australia are extremely satisfied with their experience, including all of the lifestyle aspects there. So, I think the message that we are…

David Speers: I’m sure they are. It’s a great place to be.

Simon Birmingham: Well, it’s the message that we’re a safe, welcoming country, that of course also has very high quality education and training opportunities.

David Speers: So, the trade with India, $2 billion at the moment, you want to grow that and the sector certainly wants to grow that – you’ve got a massive delegation here with your 120 plus representatives from Australia, including a bunch of vice-chancellors as well. What part of the market do you want to grow? Is it the PhDs at the very top? Is it the skills training outside of universities and more in the colleges and TAFEs? What are you after?

Simon Birmingham: We’re seeing opportunities really across the board, commensurate with the scale of India and therefore many different opportunities. So, we have the Group of Eight universities here today and they’re going to be announcing new partnership arrangements for PhD scholarships and arrangements, so really high-level engagement. And that, of course, backs in and underpins our extensive research arrangements with India. There are more than 400 different research partnerships between Australian universities and Indian entities which drives investment and activity across agricultural productivity and food security, energy security, clean energy development, areas that of course are of mutual benefit to both our countries. And so, we really see this as a partnership, it’s not just about where Australia can secure economic activity, but about how we can strengthen those ties right across the board. Including in, importantly, the skills area that India, as a country moving into a more developed phase, is seeing a huge need for skills. You referenced Prime Minister Modi’s 400 million target for upskilling Indians, that’s especially important in the vocational education and training sector, and we’ve developed some particular products that will be trialled and rolled out first in India by Australian training providers to help …

David Speers: Training them over here?

Simon Birmingham: That’s right, training people here. So, it isn’t just about a flow of people to Australia, it’s also about Australian institutions doing more, seizing opportunities here, which will then strengthen other trade, business, and economic relationships.

David Speers: Just a couple on your domestic portfolios in Australia, higher education more broadly. Last year, you commissioned an expert panel to help you form the policy on higher education reform, have they come back to you with their suggestions?

Simon Birmingham: Yeah, so we’re obviously in the process pre-budget of finalising a whole range of different policy settings in the higher education space.

David Speers: So, that will be in the budget, the higher education reform?

Simon Birmingham: That’s the timeline that I’ve said publicly we’re working to before and that’s still the timeline that we are working towards.

David Speers: And do they say deregulation’s a good idea?

Simon Birmingham: Well, no, we ruled out full fee deregulation before the last election …

David Speers: But partial, some sort of …

Simon Birmingham:… and we’ve been through a process of testing different ideas with the sector and that was really the intent of the expert panel, to allow me to test a bunch of different propositions as to how we ensure that our record levels of investment in universities and higher education and record levels of participation are actually responsive to the economy, are efficient as possible, deal with the budget challenge and the reality that we’ve seen far faster growth in investment and spending in higher education than we have seen economic growth over recent years, and so …

David Speers: And you can’t keep that up, you need to cut back the Commonwealth investment?

Simon Birmingham: Well, higher education will have to live within the budget settings that we’ve outlined before and we really are working …

David Speers: Which means cutting back the amount the Federal Government spends per student?

Simon Birmingham: We’ve looked, again, testing a range of different ways as to how we can best achieve that and so the budget policy positions we’re taking are about looking at the fairest way to do that that ensures student access is still guaranteed for the future with no up-front fees and no penalties or concerns in that regard, universities have a strong and sustainable base of funding for the future, and our student loan scheme is sustainable.

David Speers: And some flexibility for universities to charge different fee rates?

Simon Birmingham: Well, David, they’re some of the ideas that have been tested and obviously in the budget we’ll see which of those actually stands the rigour of the process we put them through, very extensive consultations, more than 1000 submissions, lots of different discussions to test ideas to see how the sector can be most responsive to our future economic needs

David Speers: We’ll see in a few weeks.

David Speers: And school funding, we’ll find out after the budget what your position’s going to be in negotiating with the states on the funding model from next year. As you know, a lot of the states, and the Catholic sector as well, are saying it’s getting very late in the piece, they need to know what money they’ve got and so on.

Simon Birmingham: In 2013, Julia Gillard and Bill Shorten were still signing schools funding deals in August. So, this idea that it’s very late in the piece is really something that (inaudible)… I understand people want to know and again we said well before the last election, these matters would be settled by COAG in the first half of this year. A couple of the Labor premiers couldn’t make the scheduled COAG meeting date so it’s been pushed back to June. That’s when we’ll have it settled.

David Speers: And you did say that some of those wealthy private schools are overfunded. Does that mean there will be less funding for them?

Simon Birmingham: Well, I’ve responded to many questions in that regard that against a technical formula you can identify a small number of schools that are notionally overfunded. There are many more, including non-government schools, that on the same basis are notionally underfunded. What we have, though, is record growing levels of funding under the Turnbull Government, $16 billion last year that grows to more than $20 billion by 2020 for all schools …

David Speers: Sure, but are you going to take any of that funding off existing schools?

Simon Birmingham: We want to make sure that funding arrangements are fair and transparent and equitable, and that means coming up with a better model than the 27 different disparate deals that Bill Shorten did…

David Speers: So some of those wealthy private schools …

Simon Birmingham:… and a whole lot of legacy arrangements that create these distortions.

David Speers: Okay. Some of those wealthy schools could lose money.

Simon Birmingham: I’ve not ruled out anything in that regard because I do want to see a transition to something that’s fair, needs-based around the distribution of our record-growing funding.

David Speers: Minister, thank you for your time. Good luck with the visit here in India and we’ll see you back in Australia.